The Cost of Nonprofit Staff Turnover: How a nonprofit fundraising event declined by $500k

On Friday, we attended AFP Charlotte’s Philanthropy conference. It was a full day with programming entirely focused on fundraising. (Shout out to the programming committee - great job!)

Sessions included everything from ‘cultivating major gifts’ to ‘fundraising for the small nonprofit’.? One topic stood out:? You Can’t Keep Your Donors, If You Can’t Keep Your Staff.? ? ? The workshop leaders opened up with a question.??

How much does it cost an organization to lose development staff???

This room full of nonprofit development staff named several parts of the job that would suffer including lost relationships, institutional knowledge, momentum, etc. ?But what does that actually cost??

Here are some examples we have experienced first-hand through our work with events:

Example 1:? In 2019, a nonprofit hosted its 20th annual event - a hugely successful gala dinner with 1000+ people in attendance.? It raised $1.2 million through sponsorships and individual donations.? This same event occurred recently (the 23rd annual), welcomed just 600 people and raised about $700K.???

Example 2:? An environmental advocacy organization hosted a virtual event in 2021 hitting its previous year goal of $75,000 with 20% of the giving from 70 individual donors. ?This year, the organization raised $65K from sponsors/table hosts but only 14 individuals made additional gifts.??

Example 3:? A beloved organization hosted its 13th annual luncheon raising $170k (400 attending) in February 2020.? The development team changed and in 2021 the event became a summer cocktail. Recently, that event raised $40k with 100 attending. They now have their 4th development director in 4 years.

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What do all of these events have in common?? ?Staff Turnover

In each case, the organizations have endured significant staff turnover.? Each time, new staff set out to execute on new ideas without understanding the data or history of giving.??

Fundraising Events Have a ‘Revenue Driver’

The most successful fundraising events have a very clear revenue driver and the nonprofit team understands that driver. ? But, when that team changes the processes without clear purpose the drivers for proven success are lost.???

In example #1, which lost $500k in revenue, the new nonprofit team did not spend time understanding the drivers of the event (i.e. what made it successful).? Prior to 2020, the drivers for the event’s success were the following: (1) who was in the room (networking), (2) corporate sponsorships, (3) pre-event, online giving alongside the table host/comp seating process (tech) and (4) in-room crowdfunding. ? ? In 2020, new staff changed the process, used different software and introduced an auction which removed the pre-event giving options. The event, which was once entirely focused on networking and a mission-centric program, now has a 30 minute live auction.? One year, guests left the main ballroom to network rather than listen to the auction and programming. Now, three years later those same people are not attending or giving.??

Before you change an event, make sure to evaluate prior year data and truly understand what is working.?

In example #2, the nonprofit returned to their in-person table/ticket model and lost 70 individual donors that made small contributions when the event was virtual.? As a statewide nonprofit, the ideal solution would be to recognize how the event could return to the in-person table sponsor model and pair it with the online, individual supporters to increase revenue. This is especially true as an environmental advocacy organization.? ? The organization had turnover in their development team, did not evaluate the prior year data from the event to recognize the opportunity for growth.

In example #3, the organization changed the tabled luncheon event in favor of something ‘more fun’ and modern. ? This is fine - except that the driver for attendance and giving at the event were the table hosts.? Prior to 2020, this organization was an expert at attracting, cultivating and retaining table hosts.? This driver was not replicated by the replacement event and subsequent staff turnover has only created more distance between what worked 3 years ago and now.?

Solutions:??

1. Invest in your staff to reduce turnover. It will save you money in the long run.?
2. Loss due to turnover is abstract.? Put some numbers to the loss to help your team and board make important changes.
3. Ensure that institutional knowledge is documented and transferred
4. New staff should evaluate and use data to drive changes, not instinct or “this worked at my old organization.”
5. Lean on partners that may have significant institutional knowledge and experience

At the end of the day, the donors and the community want your mission to succeed.? ? However, they need consistent communication, transparency and stability to give or attend events.???

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